In Time Interview, Trump Vows to Lower Drug Prices

  • In Time Interview, Trump Vows to Lower Drug Prices

In Time Interview, Trump Vows to Lower Drug Prices

"If the drug companies think that they're going to continue to have free rein to set and raise drug prices because of Trump, I think they're deluding themselves", said Erik Gordon, professor at the University of Michigan Ross School of Business.

Allergan Inc Chief Executive Brent Saunders last week cautioned his peers about a false sense of security under a Trump administration, saying the industry needs to police itself on drug pricing or face government repercussions.

The iShares NASDAQ Biotech ETF (IBB) was down 4.2% in recent trading, while the SPDR S&P Pharmaceutical ETF (XPH) was off 3.4%. The drug industry had initially rallied after Trump's election November 8 on expectations he would be less aggressive towards drug pricing than his Democratic rival Hillary Clinton.

The U.S. doesn't directly regulate medicine prices, unlike much of the rest of the globe.

Yet it could also be an area of common ground in Washington, D.C., depending on whether Trump takes up the banner for voters upset over pricing.

Time just named President-elect Donald Trump its 2016 Person of the Year.

Trump, whose transition team didn't immediately return an e-mail seeking comment, didn't make drug costs a major focus during the campaign. The government could restructure health care so that more drugs are paid for by private payers and less by government payers (either directly or indirectly). John McCain, an Arizona Republican, has proposed requiring drugmakers to report any price increase of more than 10 percent.

The NYSE Arca Pharmaceutical index of US and European drug-makers fell 2 percent to a three-year low. Lars Rebien Sorensen of Novo Nordisk A/S said recently his company will cap increases.